Reporting CEO/worker pay ratio

Well after years of headlines about out of this world CEO compensation there is a small effort to control the greed underway. A new Security and Exchange Commission (SEC) rule will require disclosing the gap (usually massive- an average of twenty to one is estimated)[Correction:an average of 20 times in 1965 to almost 300 in 2013.BP ] between a company’s chief executive pay and the rank and file workers.

Their thinking goes like this: Because the rule will generate an easily graspable and often decidedly shocking number, it may energize a cadre of new combatants in the executive pay fight. And because these newcomers — company employees, state governments and possibly even consumers — will most likely be more vocal on the matter than institutional investors have been, the executive pay bubble might actually start to deflate.

Some are hopeful, but the effort may have its hands tied from the start.One independent compensation consultant points out that the SEC’s reporting method may understate the CEO/worker compensation gap.

That’s because the calculation, which relies on what is known as the summary compensation tables in the annual proxy statement, does not include the total amounts executives have built up in their pensions and supplemental retirement plans.

And there is this detail;the rule doesn’t become effective until 2017 which means it won’t be until shareholder meetings held in 2018 that SEC pay ratio reports will be available. I guess someone figured out there is no 'shame' in waiting-at least for the fatcat CEOs.

7 thoughts on “Reporting CEO/worker pay ratio”

Right now, corporations can deduct those millions they pay to C-level executives. Bill Clinton actually pushed a bill to cap the tax deduction at something like $300k. Oh, I remember the screaming. That kind of legislation would do the trick.

“A new Security and Exchange Commission (SEC) rule will require disclosing the gap (usually massive- an average of twenty to one is estimated) between a company’s chief executive pay and the rank and file workers.”